GBP/USD meets fresh supply near 1.3250, BOE eyed

GBP/USD’s recovery from post-UK retail sales lows lost pace just shy of 1.3250 levels, with the bears snatching back control amid heightened nervousness as we head closer to the BOE rate decision.

GBP/USD on its way to 20-DMA at 1.3240

Currently, GBP/USD trades -0.05% lower at 1.3230, capped below the mid-point of 1.32 handle. The cable ran through fresh offers and now reverts towards 1.32 handle as markets continue to digest above estimates UK retail sales data ahead of the BOE verdict, which will be accompanied by the minutes of the meeting.

The UK’s retail volumes fell -0.2% in Aug m/m, while the annualized retail spending rose 6.2%. Markets had estimated a -0.4% dip on a monthly basis, while a +5.4% reading was expected on yearly basis.

All eyes now remain on the BOE monetary policy announcement, with wide expectations that the central bank will keep its policy steady and offer no new surprises for the GBP traders.

Analysts at MUFG explains, “For the pound the only area of focus will be on forward guidance and what signals are given in the minutes of the meeting over the potential for the MPC to follow through with its guidance last month that a further rate cut will be forthcoming before the end of the year.”

GBP/USD Levels to consider                           

The pair has an immediate resistance at 1.3279/94 (daily high/ 10-DMA), above which 1.3350 (psychological levels) would be tested. On the flip side, support is seen at 1.3201/00 (daily low/ round number) below that at 1.3163 (50-DMA).